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I used to be some high FTSE 100 dividend shares just lately, and my eye once more fell on Phoenix Group Holdings (LSE: PHNX) and its forecast 10.6% yield.
I labored out that if I make investments £200 per 30 days in Phoenix Group, after 20 years I may have sufficient to pay me an annual passive earnings of round £16,000.
That makes lots of assumptions, although. Just like the dividend would stay unchanged for the subsequent 20 years. Oh, and the share value wouldn’t change both.
No easy trip
Anybody who’s checked out occasions within the monetary sector over the previous 10 years will most likely dismiss the prospect of both of these taking place right away.
Phoenix is in a notoriously cyclical enterprise. And if earnings volatility ought to injury the dividend one yr, I worry the share value may endure.
Nonetheless, forecasts look good, and I feel Phoenix could possibly be a pleasant addition to a long-term Shares and Shares ISA. However I’d desire a good little bit of diversification to assist handle my dangers.
Lengthy-term security
Taking a look at among the different FTSE 100 dividend yields on supply now, I simply can’t ignore Taylor Wimpey.
There’s a 6.4% dividend yield on supply. It could nonetheless be a pleasant annual return if it may well maintain going. Within the quick time period, although, I feel that most likely raises the most important warning.
Fellow builder Barratt Developments has lower its dividend, given stress on the property sector. And Taylor Wimpey may do the identical.
However the actual attraction to me is the very long-term nature of the enterprise. The UK’s housing scarcity, plus obstacles to new corporations attempting to get in, make me assume I see a money cow right here.
With security in thoughts once more, I feel I’d add Tesco to a long-term earnings portfolio if I used to be beginning now. The dividend is modest at 3.8%, however I’d hope for steady complete returns.
Controversial
My ultimate two strategies listed below are maybe a bit controversial, for various causes.
One is British American Tobacco, with a 9.9% dividend yield. It’s maybe a bit dodgy from an ethics standpoint. And plenty of traders assume the tobacco business is doomed anyway.
However I feel tobacco merchandise could possibly be with us for a really very long time. And purely from a monetary view, I can see one other money cow right here.
My fifth alternative is BT Group, with its enormous debt pile the most important disadvantage I can see. Oh, and the share value slide of the previous 5 years hasn’t helped complete returns, even when the dividend has been good.
Nonetheless, after posting what could possibly be a turnaround set of FY outcomes, BT has upped its dividend once more. If it may well maintain its 6%+ yields going, possibly I may simply take the money and never fear about the rest.
Complete returns
Talking of complete returns, the typical Shares and Shares ISA has managed 9.6% per yr previously decade.
That’s forward of the very long-term UK inventory market efficiency. However I reckon there could possibly be sufficient low cost dividend shares within the FTSE 100 to present us crack at it.
